Anyone who follows my advice will know that my best pick for 2015 is U.S. Silica (SLCA). I have written many articles on the company’s stock. The fact of the matter is that the company has 80% of its sand under contract for 2015, yet the stock goes down with oil prices. This is wrong.
U.S. Silica sand is a money saver for oil companies because the sand allows them to get the most possible amount of oil from their wells. Low oil prices do not deter companies from getting more oil from their wells; in fact it actually may make them use even more sand. This is because the firm will want to get every last drop of oil from a well since it is a sunk cost once it is drilled. This would prevent it from having to spend more money to drill a new well. I have written about this before; if you want to read more then go to my seeking alpha page.
The reason for this post is to highlight the huge amount of insider buying that the company has had in the past few weeks. Insider buying is said to be a true indicator of insider’s opinions on the stock. If an insider sells, he/she may just be doing it to diversify or for tax reasons. If an insider buys, he/she is doing it for one reason, which is that he/she thinks the stock value will appreciate.
Let’s go over the insider purchases of the stock. The insider purchases have begun on December 15th. This is important because, if the purchases were made when the stock was at $40 than they would prove to be a false indicator. All of the purchases have been made with the stock between $24 and $26 which is where it currently trades at.
Michael Stice (director) bought 8,200 shares on 12/15 at $24.19.
Charles Shaver (director) bought 5,500 shares on 12/18 at $26.99 and on 12/22 bought 5,500 at $26.80.
Jennings Kacal (director) bought 2,600 shares on 12/22 at $26.77 and on the same day bought 1,500 shares at $26.79.
Peter Bernard (director) bought 5,000 shares on 12/31 at $25.41.
Bryan Shinn (President and CEO) bought 4,000 shares on 12/31 at $25.43.
I think it’s safe to say that the insiders agree with me! I bought the stock at the these prices as well which gives me a weighted average share price of about $33.
Happy New Year!